Creating a budget is a crucial task for any business. It helps owners, executives and managers estimate revenues and expenses, set goals and closely monitor costs throughout the year.

Of course, budgets are just that — estimates. The actual amounts for revenues and expenses at the end of the month, quarter or year will almost certainly differ from budget projections. Those differences are called variances and analyzing those variances can give leaders a deeper understanding of a company’s financial well-being.



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